Income investors love their dividends, but the one problem with most dividend-paying stocks is that the dividends are only paid quarterly, making it difficult for some investors to budget for regular bills like rent and utilities. However, a number of real estate investment trust (REIT) stocks solve this problem by sending out 12 monthly dividend payments per year.
As with all dividend stocks, investors should not just chase high yields but look for stable companies with good long-term track records. These three REIT stocks are well-known, solid companies with reliable dividend-paying histories.
Realty Income Corp. O is a monthly-paying dividend REIT that owns and has long-term triple net lease agreements with more than 11,400 properties throughout the world. Its U.S. tenant list includes large, well-known retail companies such as Walgreen Boots Alliance Inc, Dollar General Corp, FedEx Corp and Dollar Tree Inc.
Among income investors, Realty Income is one of the most popular and well-followed REIT stocks. Realty Income is one of 65 S&P 500 Dividend Aristocrats, meaning it has increased its dividends for at least 25 consecutive years. O has increased its dividend 116 times since its initial public listing in 1994.
Unlike many other REITs that have underperformed over the past 52 weeks, O is up 7.5% with a 4.2% dividend yield.
LTC Properties Inc. LTC is a California-based REIT that owns and leases both senior housing and skilled nursing facilities. It has well over 200 investment properties, covering 29 states across the U.S. LTC’s revenue is derived from triple-net leases, mortgages and mezzanine loans.
Like others in the senior housing sector, LTC stock was decimated in February 2020. For the next two years, LTC struggled with increased costs and vacancies related to the COVID-19 pandemic. But after missing analysts’ estimates for three consecutive quarters, LTC finally beat the street with higher revenue and earnings per share (EPS) in the second quarter of 2022. As a result, the stock has been on a tear since May and is up about 35% in that time.
LTC pays a monthly dividend of 0.19 or $2.28 annually. At the current price of $44.41, that’s a dividend yield of 5.13%. It would seem that LTC has moved past its pandemic-related difficulties and could be a lucrative monthly income stock going forward.
STAG Industrial Inc. STAG is a Boston-based REIT that purchases and operates single-tenant industrial properties across 40 states. It currently has 569 properties in its portfolio, with 111.5 million square feet of space worth approximately $8.1 billion.
Despite increasing its revenue and EPS over the last few years, plus beating analysts’ estimates over the last four quarters, STAG stock has been taking a curious pounding. A $42 stock in April 2022, STAG fell to $29 in July before rebounding to $32.49 as of Wednesday’s close. All told, STAG is down about 20% over the last 52 weeks.
One negative with STAG is that the dividend has only grown by 3% over the past five years. On the other hand, the dividend has been paid every month without any cuts, and the latest quarterly funds from operations (FFO) of 0.56 is more than sufficient to cover three months of dividend payments totaling 0.365. The current dividend yield of 4.5% is well above the yields of this past spring, making STAG a potential bargain for income investors right now.
Today’s Real Estate Investing News Highlights
- The target IRR has been increased to 18.4% for the Baypoint Apartments offering on RealtyMogul. The investment has a target cash yield of 7.9% and an estimated hold period of 4 years.
- The Flagship Real Estate Fund by Fundrise has acquired a townhome rental community in Charlotte, NC, for approximately $6.3 million. The Flagship Real Estate Fund has produced YTD returns of 6.9% so far in 2022.
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